Tesla Gigafactory battery production for Model 3 is about to increase, says Panasonic

Earlier this month, Tesla made clear that its biggest bottleneck to increasing Model 3 production is the battery module production at Gigafactory 1 in Nevada.

Panasonic, Tesla’s partner for battery production at the Gigafactory, said that process automation has progressed and they now expect the output to “soon” increase.

Last month, Tesla CEO Elon Musk hinted that there might be issues at Tesla’s Gigafactory in Nevada, where the Model 3 battery pack and drive unit are being manufactured.

In Tesla’s shareholder’s letter earlier this month, they confirmed that it is the biggest bottleneck:

“To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected. The biggest challenge is that the first two zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned by Tesla. We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming, and we are confident that throughput will increase substantially in upcoming weeks and ultimately be capable of production rates significantly greater than the original specification.”

While Musk said that they are confident that they will fix the issue, he never offered a clear timeline beyond the expectation that they should be able to produce “a few thousand” Model 3 units per week by the end of the year.

In the meantime, the Model 3 battery module manufacturing process has been handled manually and Model 3 production volume has been limited to a few dozen units per week, but Panasonic Chief Executive Kazuhiro Tsuga said during an earnings call that he expects the issue will be fixed soon.

He said (via Reuters):

“This process (for battery packs) will be soon automated, and then the number of vehicles to be produced will rise sharply,”

Though he refused to confirm a timeline for any expected volume.

Panasonic trying to double its automotive business and its partnership with Tesla is an important part of that plan. Panasonic is currently the biggest automotive battery supplier and Tesla is the biggest li-ion battery consumer.

Electrek’s Take

Now it’s nice to see Panasonic showing confidence in production soon increasing, but as we understand the problem, the issue is with Tesla’s manufacturing at the factory and not Panasonic, which is in charge of battery cell production.

Therefore, it would be more reassuring to see Tesla talking about the issue being fixed soon, but Tsuga is nonetheless likely more informed than us.

Either way, it’s a little bit of good news for Model 3 reservation holders and in line with Tesla finally opening up Model 3 orders to regular reservation holders last week.